Monday, May 7, 2012

Technology Review's publisher claims publishers don't like apps after magazine fails to draw paid subscribers

Technology Review's publisher Jason Pontin today penned a web post with the provocative title Why Publishers Don't Like Apps which says that the future of media on mobile devices is not apps but the web.

The post details Pontin's disappointing experience with the Technology Review app, which the publisher said only sold 353 subscriptions and cost the magazine $124,000 in outsourced software development.
First, a few things about the Technology Review app: the app resides outside the Apple Newsstand, the app Apple created specifically to help publishers sell subscriptions; the app was, but is no longer, a hybrid app designed to give readers access to the website content while also offering readers a chance to download replica versions of the magazine.

Pontin describes the difficulties his staff had in adapting their print magazine to tablets:

It wasn't simple, it turned out, to adapt print publications to apps. A large part of the problem was the ratio of the tablets: they possessed both a "portrait" (vertical) and "landscape" (horizontal) view, depending on how the user held the device. Then, too, the screens of smart phones were much smaller than those of tablets. Absurdly, many publishers ended up producing six different versions of their editorial product: a print publication, a conventional digital replica for Web browsers and proprietary software, a digital replica for landscape viewing on tablets, something that was not quite a digital replica for portrait viewing on tablets, a kind of hack for smart phones, and ordinary HTML pages for their websites.
In Pontin's post the publisher uses the word "replica" 15 times. Technology Review, it turns out, could not sell its "replica" editions of the magazine inside an app that did not reside inside the Newsstand, and in an app that offered free web content.

For Pontin, the future is HTML5 and going the way of the Financial Times. But what Pontin doesn't mention in his post is that the main reason the FT pulled their app efforts was information sharing, not selling subscriptions. In fact, the FT was doing fine with selling digital through the iPad, but they saw value in the customer information that could be had through selling subscriptions directly. Apple didn't allow that so the FT pulled out.

“(Giving away) thirty percent of subscription revenue isn’t something we celebrate," Financial Times chief executive John Ridding told paidContent, "but that was secondary actually – we already pay other distributors and agents; newsagents take a cut. Central to our whole strategy and all our aspirations is to have that direct relationship with the reader.”

As I've written several times in the past, financial newspaper and magazines have a huge advantage selling digital because their readers see the subscription as an investment – business information is valuable and the cost to subscribe is a tax deduction (at least in the U.S.) for many readers. Because of that, many financial news products are doing fine, both inside the App Store, and outside of it.

Technology Review has dumped their replica edition, and that is probably good. But Pontin's post seems to be that of a publisher who tried to play the app game his way and when it didn't work out is claiming that the whole game is rigged. He may speak for a lot of publishers who are struggling with mobile and tablets, but his claim to speak for publishers, in general, seems like going way, way too far.


peter hobday said...

You don't say what revenue the publisher made, so we can compare with costs - and that is the determining factor here. And most marketing led publishers count around three years or more revenue into that calculation. If that app development was a one-off cost then the publisher should be happy with that number of subs unless sold at very low rates ..

Douglas Hebbard said...

I have no idea of their revenue, though based on the number of subscriptions I would think it was low.

I don't doubt that their strategy did not work - not being in the Newsstand, having a replica edition are both obvious errors. My problem with Pontin's post is that he comes to the wrong conclusion. What he should have said is "we did it my way, and it didn't work, maybe I should have seen what the other guys were doing."